Air war. The battle against ISIS from the skies over Syria is expected to heat up as coalition forces look to retake Raqqa, the city that ISIS calls its capital. How long will it take?

And run again? President Obama tells CNN he could have won a third term if he could have run for president again. Just now, Donald Trump responded on Twitter.

Wolf Blitzer is off. I'm Jim Sciutto, and you're in THE SITUATION ROOM.

Tonight we're following a very unusual and bitter split between Israel and the United States. Israeli Prime Minister Benjamin Netanyahu today defending his scathing criticism of President Obama, saying the world respects strong leaders who stand up for themselves. Netanyahu says there is deep anger and dissatisfaction, because the U.S. allowed the United Nations Security Council to condemn Israel's continued building of settlements in the West Bank. Instead of vetoing the resolution, the U.S. abstained.

Israelis also announced they are suspending working ties with nations that supported that anti-settlement vote.

In politics, President Obama tells CNN's David Axelrod that he could have beaten Donald Trump, if he'd been able to run for a third term. Donald Trump just fired back on Twitter, quote, "No way."

Tonight top Palestinian diplomat Maen Areikat is in THE SITUATION ROOM to give us his perspective on the U.S.-Israeli split, and our correspondents, analysts and guests have full coverage of the day's top stories.

Let's begin with Israel's continuing anger at the U.S., as well as major countries in the United Nations. CNN's global affairs correspondent, Elise Labott, has the very latest.

after the vote that Israel recalled its ambassadors from New Zealand and Senegal, those countries that put the resolution forward. Now Israeli officials tell us that they are limiting working ties with the 12 nations that also voted for the measure.

The prime minister of Ukraine, who was scheduled to travel to Israel in the coming week, that visit has been canceled. Other foreign ministers will not be able to meet with Prime Minister Netanyahu, and ambassadors from those countries will not be welcomed at the foreign ministry as, you know, the normal type of business between the embassies will be curtailed.

Now, it's a temporary move. It's not cutting of diplomatic ties, but it is a show of force, if you will, to demonstrate Israel's displeasure with those countries that voted against them in the U.N. Security Council.

But, you know, interestingly, Jim, Israel did not take any action against the United States, which abstained from the resolution and let it pass. But certainly, Prime Minister Netanyahu has not been quiet about his fury for the United States for what he called a shameful ambush against Israel at the U.N., Jim.

SCIUTTO: He know we'll have a new president soon enough with perhaps a different view. Elise Labott, thanks very much.

Let's get more on the acrimonious split between the governments of the U.S. and Israel. Oren Liebermann, he is in Jerusalem. Israeli Prime Minister Netanyahu, he certainly isn't backing down. Is this largely for domestic consumption?

OREN LIEBERMANN, CNN CORRESPONDENT: Well, he's certainly sending a statement, not only to his voters and to Israel but also to the United States and other countries that voter for this resolution.

We saw the first statements come out right after this vote, and they have continued, perhaps even getting angrier. Netanyahu tonight backing up what he's done so far, calling it responsible and a vigorous response to this, what he calls a shameful vote at the Security Council resolution. Here's what he said at this week's cabinet meeting.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: Over decades, American administrations and Israeli governments have disagreed about settlements, but we agreed that the Security Council was not the place to resolve this issue. We knew that going there would make negotiations harder and drive peace further away. And as I told John Kerry on Thursday, friends don't take friends to the Security Council.

I'm encouraged by the statements of our friends in the United States, Republicans and Democrats alike. They understand how reckless and destructive this U.N. resolution was. They understand that the Western Wall isn't occupied territory. I look working with those friends and with the new administration when it takes office next month.

(END VIDEO CLIP)

LIEBERMANN: And Jim, there were the words, "new administration." Netanyahu has made it blatantly obvious he's looking forward to working with President-elect Trump and effectively done working with Obama over these next few weeks.

[17:05:04] SCIUTTO: Oren, now the Israeli government making what you can call an explosive charge. That's that the U.S. didn't just let this resolution go through the U.N. They say that the U.S. behind the scenes orchestrated the whole thing.

LIEBERMANN: And at first this was whispered quietly. It was -- at first off the record, and then it was Israeli officials. And now it's an accusation that's coming from Netanyahu and its top officials, both here and in the United States.

Here is the Israeli ambassador to the U.S., Ron Dermer, making the accusation.

(BEGIN VIDEO CLIP)

RON DERMER, ISRAELI AMBASSADOR TO THE U.S.: The reason why the only ambassador that the prime minister of Israel met with was the American ambassador, is that's the only country where we have any expectation to actually stand with us at the United Nations.

Look, it's an old story that the United Nations gangs up against Israel. What is new is that the United States did not stand up and oppose that gang-up, and what is outrageous is that the United States was actually behind that gang-up. We have clear evidence of it. We will present that evidence to the new administration through the appropriate channels. And if they want to share it with the American people, they're welcome to.

(END VIDEO CLIP)

LIEBERMANN: We've pushed Israeli officials both here and there on what is this evidence, what is this information? So far as we've gotten no response on what that information is. Normally, both the U.S. and the Palestinians have denied there was any sort of collusion behind Israel's back on putting this resolution together and getting it passed at the U.S. -- at the U.N. Security Council.

SCIUTTO: Oren Liebermann there in Jerusalem, where Donald Trump wants to move the U.S. embassy in Israel.

President Obama is vacationing in Hawaii, but one of his top aides says the U.S. isn't backing down on its opposition to new Israeli settlements. This has been a longtime view of multiple administrations.

Let's go to CNN's Athena Jones in Honolulu. What are you hearing in reaction to Israeli -- Israeli step today, Athena?

ATHENA JONES, CNN CORRESPONDENT: Hi, Jim.

That's right, this has been a position of multiple administrations. The White House is not responding to this move by Israel to cut ties with the countries that voted against it in this U.N. vote, but the message the White House was sending in abstaining from that U.N. vote last week is that the Obama administration agrees with much of the international community, that the continued construction at the building of these Israeli settlements in disputed lands is not helpful to the peace process, not helpful to any eventual two-state solution.

The White House is stressing that this is not a new position. It's not something that should have been a surprise to the Israeli government.

Here's more of what national security advisor Ben Rhodes had to say about this in an interview on Israeli TV.

(BEGIN VIDEO CLIP)

BEN RHODES, NATIONAL SECURITY ADVISOR: It's not an ambush when President Obama and Secretary Kerry have been saying in hundreds of conversations and in public comments that Israeli settlement activity was pushing into the West Bank in a way that was making the two-state solution unachievable over time.

When we see laws that aim to legalize outposts, when we see rhetoric that suggests that this is the most pro-settlements Israeli government in history, and when we see the facts on the ground, again, deep into the West Bank beyond the separation barrier, we feel compelled to speak up against those actions.

Meanwhile, President-elect Trump is weighing in with a tweet not long ago, saying, "The United Nations has such great potential, but right now it is just a club for people to get together, talk and have a good time. So sad."

And you'll remember that tweet after the U.N. vote last week where Trump said, when he's president, things will be different with the U.N. These are the reasons, or among the reasons that you're hearing Prime Minister Netanyahu saying he's really looking forward to working with the next administration, not this one -- Jim.

I want to get now a very different, very necessary perspective on the settlement controversy as well as this Israel/U.S. split. With me now is Maen Areikat. He's the chief Palestinian representative to the U.S.

Mr. Areikat, thanks very much for taking the time. MAEN AREIKAT, CHIEF PALESTINIAN REPRESENTATIVE TO THE U.S.: Thank you

very much.

SCIUTTO: First of all, if I could get your reaction to Israel's move today. You had a lot of angry rhetoric over the weekend against various folks who voted for this resolution, but particularly aimed at the U.S. and the Obama administration. Now you have this diplomatic step. What's your reaction?

AREIKAT: Well, I think the Israelis are trying to ignore the fact that they have been warned many times over by the Palestinians, by the United States, by the international committee that they cannot have both land and peace.

The settlement policies of the current Israeli government clearly indicate that this government does not have any interest in ending the conflict with the Palestinians. They want to continue to grab Palestinian land. They want to continue to build illegal settlements, and they don't have any plans in the near future to put an end to this conflict.

SCIUTTO: Did you welcome the move from the U.S., abstaining from this vote?

AREIKAT: Well, we have been hearing a lot of encouraging statements from the current U.S. administration, and we have been urging them to translate those statements into action.

The United States did what conforms with its long-standing policy, since the days of Lyndon Johnson, 1967. Ronald Reagan, the Republican president, used abstention seven times during his two terms as president of the United States to allow resolutions at the U.N. and to condemn settlement activities. So the U.S. is doing just what they have done all the time.

[17:10:21] SCIUTTO: I want to ask you, because of course, you have a new administration coming in, in about three weeks, with what appears to be a very different view. You look at Donald Trump's selection for ambassador to Israel. He is someone who has said that the idea of a two-state solution is over, in effect.

Are you concerned at all that this hard push from the Obama administration on the way out will put you in a weaker position as the new administration comes in?

AREIKAT: No, I think -- I think what the administration is trying to prepare the ground for the next administration, that there are certain issues that they need to be given the right attention.

We are not going to anticipate what the new administration policies would be. However, we will be more than willing to work with them. We hope the next administration will understand that, in order to end this conflict between the Palestinians and the Israelis, these settlement policies must end. Israel must end its occupation, which is approaching the 50th -- the 50th anniversary next June. And there is only one way out: end the occupation, provide peace and security for both Israelis and Palestinians.

SCIUTTO: We had the Israeli ambassador to the United States, Ron Dermer, on our air a short time ago with my colleague Jake Tapper.

And he accused the Palestinians of having missed opportunities in the past. He claims, for instance, to have done -- that Israel did a ten- months moratorium, but that didn't get Israel any closer or bring the Palestinians any more to the negotiating table. What's your response to that criticism?

AREIKAT: Ron Dermer wasn't there when I was there in September of 2010 when that so-called moratorium ended. The moratorium was done in the West Bank but did not include settlements in East Jerusalem. I remember when the administration, when Secretary Clinton urged the Israeli prime minister to extend that moratorium for two or three more months to allow for the Israelis and Palestinians to continue negotiations, and the Israeli prime minister refused.

So I was in those meetings. I don't believe Ron Dermer was in those meetings.

SCIUTTO: Let me ask you this. Because there's been a lot that's been made of the idea that has been a campaign promise of Donald Trump to move the U.S. embassy from Tel Aviv to Jerusalem. I don't think a lot of folks in the audience know why exactly that's important from your side. Can you explain that?

AREIKAT: Jerusalem is important not only to Israelis and Jews. It's important to Arabs, Palestinians, Muslims and Christians around the world. It's a city that is important to all these religions and to all these peoples. Any move to give one party monopoly over such an important city is going to escalate tension in the region.

I strongly believe that the next administration will be wise enough to understand that Jerusalem is going to be a sensitive issue, must be negotiated between the two parties, and no unilateral action should be taken by anybody, including the United States.

SCIUTTO: And as you referenced, in peace negotiations, it's been said by many involved that you need to share Jerusalem between the sides because of its historical ties to multiple religions. But the fact is, is the Israeli government is based in Jerusalem. The Knesset is there. Parliament is there. It's effectively based there, even if the U.S. embassy is in Tel Aviv. What practical difference would it make if Trump follows through on what he says he will do?

AREIKAT: The partition plan of 1947, which allowed for the creation of the state of Israel, provided that Jerusalem should be a corpus separatum, which means a separate entity and that neither side should claim monopoly over the western or eastern side of the city.

After the 1967 war, Israel occupied the western side, and Jerusalem fell under Arab control. Israel today has its offices in West Jerusalem, but no country, including the United States, does not recognize Jerusalem as the capital of the state of Israel. SCIUTTO: Have you or your team reached out to the Trump transition

team to express your views? Have they accepted an offer to express your views?

AREIKAT: Well, we are -- we are reaching out. We're trying to reach out. We understand the president-elect and his team are busy with a lot of appointments and a lot of domestic issues. And again, we are very much receptive to starting a dialogue, a communication with the new administration. I hope they will give us the opportunity to express our views, the same way they are giving the Israelis...

SCIUTTO: So just so I'm clear, you have reached out to express those views, but that -- that invitation has not been accepted?

AREIKAT: It's in the process, in the process. We are trying to work some kind of an arrangement, but we are hopeful that this will happen in the near future.

SCIUTTO: And has -- the Trump administration says it's open to hearing your views?

AREIKAT: I would expect them to say so, because if not -- if they don't want to talk to the Palestinians, they want -- you know, President-elect Trump said that he would like to see a deal done between the Palestinians and the Israelis. How can you make a deal if you don't talk to an important partner?

[17:15:04] SCIUTTO: You've been involved in negotiations for a number of years. Jared Kushner, who I'm sure you know of -- this is Donald Trump's son-in-law, the husband of Ivanka, he -- Donald Trump has said he's going to have a potential lead role in the negotiations. Very young man, as you know, not a particular amount of experience on the ground there. How would you react to that? Would you -- would you be willing to sit across the table?

AREIKAT: We would be willing to sit across the table with anyone that the new administration chooses as its representative. We are again -- once again receptive as long as the new administration is willing to listen to our views, our opinions, and our positions.

SCIUTTO: Maen Areikat, we appreciate you taking the time today, and we wish you the best of luck.

AREIKAT: Thank you very much, sir.

SCIUTTO: Thank you.

Next, coming up, the war on ISIS. How much can President Obama accomplish in the few weeks that he has left before handing off the fight to his successor?

(COMMERCIAL BREAK)

SCIUTTO: As the year winds down, there are signs that the war on ISIS is ramping up. CNN Pentagon correspondent Barbara Starr has been working her sources. Barbara, what's the state of the war against ISIS, particularly as President Obama is just a couple of weeks away, three weeks away from handing over the White House?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, how much can he really accomplish in those few days and weeks he has left? Obviously, the key question now.

[17:20:06] Now President Obama had just authorized 200 additional Special Operations forces to go to Syria. Authorized. The understanding is certainly not all of them are there yet. Will they all go in those opening days and weeks of a Trump administration?

In the last several weeks, if you look at the public statements by the Pentagon, they're now conducting dozens of airstrikes over Mosul, in Iraq and Raqqa in Syria, the two strongholds of ISIS, trying to push them back, trying to get them out of there. Iraqi forces still struggling to move deeper into Mosul in Iraq.

And the question now for Donald Trump is what does he really want to do with, you know, the plate in front of him now? The U.S. military says it will take them through 2017 to push ISIS out of both of those cities. There may be another year of some type of fighting and support for local forces on the ground before they can really accomplish what they want to.

Donald Trump will have to make some decisions on how he wants to proceed. If he wants to ramp up the bombing in Iraq, he needs the permission of the Iraqi government. It is a sovereign country.

If he wants to ramp up U.S. presence on the ground in Syria, very dangerous business. That country very unsettled, and there a top Palestinian diplomat Mann Erekat there is that Russian friends there -- Jim.

SCIUTTO: Barbara, is there a concern among the allies, U.S. coalition allies on the ground there, particularly those Kurdish forces have really been the front line in this ground battle, particularly inside Syria. Is there concern among them that, with Donald Trump coming into power, they may pull back U.S. and coalition support?

STARR: Well, I think that's exactly the question. There is uncertainty about that right now, because the president-elect hasn't really spoken to it. We don't know what he thinks. We don't know what the incoming defense secretary thinks.

The Kurdish forces really -- you know, they have struggled. There's no doubt about it. But they have been reliable partners. They are pushing towards Raqqa, trying to get ISIS out of there, while the U.S. bombs overhead, trying to locate those high-value targets like the leader of ISIS, Baghdadi, if he is there.

So what does Donald Trump do? Does he continue with what is essentially the Obama military policy there, supporting the Kurds on the ground, or does he make some radical changes? Does he either pull U.S. support back or ramp up U.S. support, which would be very complicated in that country.

SCIUTTO: A lot of questions to that effect around the world, really, in a lot of theaters.

A final question. Is there a sense that President Obama, with this push we're seeing from the air and on the ground, that he's eager to take out the ISIS leader, Abu Bakr al-Baghdadi, before leaving office next month? Is that a goal?

STARR: I think it's very fair to say that the president and the entire Obama national security apparatus would very much like to get Baghdadi. They have been looking for him. There's no question about that. They have always wondered exactly where he is.

There's a lot of intelligence being focused on both Raqqa and Mosul and points in between, in case he has hit the road somehow and is hiding somewhere in the countryside, in that isolated desert area out there.

But clearly, I think it's very fair to say, a lot of focus continues on Raqqa. That is where, over time, the leadership of ISIS has been found, many of them killed by U.S. drone strikes in and around Raqqa.

So it seems like they are staying pretty close to home, and if they can find Baghdadi, they say they will get him.

SCIUTTO: And the campaign has had a lot of success against ISIS senior leadership of late.

Barbara Starr at the Pentagon, thanks very much.

STARR: Thank you.

SCIUTTO: Coming up, Donald Trump responds to President Obama's claim that he could have won a third term.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[17:27:49[ SCIUTTO: While Democrats continue to argue about what went wrong in this year's presidential election, President Obama says he could have won a third term if he'd been allowed to run.

Let's go back to CNN's Athena Jones, who's in Hawaii, where the president is vacationing. What else did he have to Axelrod? I mean, this -- Athena, this was really interesting, a very far-reaching interview.

JONES: Absolutely. That's what's most interesting about it, I think. These are clearly two people who have known each other for a long time, more than two decades. They're old friends.

And so you hear a relaxed President Obama, very contemplative. And one of the most interesting sections of this nearly hour-long sit-down for "the Axe Files" podcast is where the president talks about how he stills believes in that vision he laid out back in 2004 at the Democratic National Convention and the speech that put him on the map. That was the speech where he talked about suppose about how there were not red states and blue states, but a United States of America; how there's more that unites Americans than that divides them. He said he still believes that. But also what you just mentioned, that suggestion that he believes -- not only that he believes in that vision, but that Americans largely believe in that vision and that, if he could have run again, he could have won.

Here's more of what he had to say on that.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: In the wake of the election and Trump winning, a lot of people have suggested that somehow, it really was a fantasy.

I am confident in this vision, because I'm confident that, if I had run again and articulated it, I think I could have mobilized a majority of the American people to rally behind it.

(END VIDEO CLIP)

JONES: Very interesting to hear the president suggest that he could have won a third term if he'd been allowed to run.

He also talked about what he believes Democrats need to do to be successful electorally on the presidential level, as well as the state and local level. Take a listen to that.

(BEGIN VIDEO CLIP)

OBAMA: If we can't find some way to break through what is a complicated history in the south and start winning races there and winning back southern white voters without betraying our commitment to civil rights and diversity, if we can't do those things, then we can win elections, but we will see the same kinds of patterns that we saw during my presidency: a progressive president but a gridlocked Congress that can't move an agenda forward.

(END VIDEO CLIP)

[17:30:27] JONES: And he didn't just talk about voters in the south. He also talked about the need to appeal to rural voters everywhere, to farmers, to factory workers.

Not surprisingly, we've also heard President-elect Trump responding to this, tweeting not long ago, "President Obama said that he thinks he would have won against me. He should say that, but I say no way. Jobs leaving, ISIS, Obamacare, et cetera." So it's kind of an indirect conversation that the president and the president-elect are having over the airwaves and social media.

Back to you.

SCIUTTO: We didn't think Trump would be able to resist for long. Athena Jones in Hawaii, thanks very much.

I should note that David Axelrod is going to join me here live in the next hour of THE SITUATION ROOM.

But first, let's bring in our political and legal experts. I want to start with you, Dana. And Athena referenced this comment from Obama, saying, "Listen, had I run -- had I run, I could have won a third term." Implicit criticism of Hillary Clinton?

BASH: Yes, yes. I mean, you didn't have to read very deep and long between the lines to see that that's what that was. And he also said that "I think I would have been able to articulate a message that would have been different."

But who knows? Who knows? I mean, it you look at the data, you look at the numbers, he is quite popular. He's in the mid-...

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Fifties.

SCIUTTO: Approval rating.

BASH: ... 50s when it comes to his approval rating, which is pretty good for somebody who's been in the White House for two terms.

But at the same time, some of the overall numbers were not -- they were not right during the election, so who knows if that's true? And, you know, look, shoulda woulda coulda.

I do think that -- this even happened to Hillary Clinton -- when somebody is not a candidate, or no longer a candidate, the American public views them differently. When Hillary Clinton was secretary of state, she had sky-high approval ratings. And that's, I think, one of the main reasons why President Obama is doing well.

SCIUTTO: Is that a realistic argument from the president?

SWERDLICK: Yes, I'm going to go out on a limb and say, yes, I think so. He's got a 50-something-percent approval rating. He won both of his elections, the popular vote and the Electoral College. Unemployment right now is under five USICs (ph). Unemployment is under 10. Stock market is at 19,000. Yes, I think that's a reasonable statement for him.

SCIUTTO: Let me ask you this, Ron, and let me direct this to you. Let's look at the president's numbers, though, and let's just look where the Democratic Party went in the House, in the Senate over the last eight -- almost eight years, losing tremendous ground in the Senate, losing tremendous ground in the House, losing tremendous ground in state houses, losing tremendous ground in state legislatures.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Yes.

SCIUTTO: Shouldn't President Obama accept responsibility for that loss of ground? Clearly, voters don't -- aren't giving him credit, at least in the ballot box.

BROWNSTEIN: Yes, no. Just to button up the previous conversation, given his approval rating where it is, it would have been -- you would have to say he would have been the favorite.

But the question, I think, as Dana correctly noted, was how much of his approval rating now is in contrast to the other two candidates, and would it have been more marginal if he had actually been on the ballot himself?

Look, there is no question, I think, that President Obama has accelerated trends that existed before him and is leaving the Democratic Party with a coalition that is much better suited to compete for the White House than it is for the Congress.

The fact is, Democrats have now won the popular vote in six of the past seven presidential elections, which no party in American history has ever done, but they have done that behind a coalition that is centered on three groups -- minorities, millennials, college-educated white voters.

And there are two structural problems with that coalition in terms of competing for the Congress. One is that the first two of those groups, minorities and millennials, don't show up nearly as much in the midterm as they do in the presidential, and that's when Democrats suffered their biggest losses under President Obama.

And the second is that they are geographically concentrated in a way that makes it hard for them to compete for the House. They're overly concentrated in cities. And also leaves them in a situation where they cannot compete effectively for the large numbers of smaller rural, culturally-conservative states.

And so what you have, essentially, is a Democratic coalition held together by cultural liberalism more than economic interests. And that is a formula that works better for the White House than the Congress, and we saw in this election that, even if it works with the popular vote, it can have trouble with the Electoral College?

SCIUTTO: Yes, I mean, that's the thing. Six out of seven, but four out of -- only four out of seven times where they actually won the White House.

BROWNSTEIN: Yes.

SCIUTTO: Because there was Gore, as well.

Jeffrey Toobin, if I can ask you, because there was a very interesting moment in this interview when President Obama -- I mean, not even begrudgingly, I mean, he outright praised the tactics of Senate Majority Leader Mitch McConnell for effectively obstructing his agenda throughout his administration. I wondered, and my team here wondered, was he sending a message to

Democrats to use that same strategy against Trump?

[17:35:07] JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I think he probably was. You know, Mitch McConnell did not care that "The New York Times" editorial page was going to say nasty things about him for being obstructionist. You know, he understood that the way to succeed as the opposition party was to prevent the president from doing anything and then say the president isn't doing anything.

Now, that may be intellectually inconsistent, but it was political effective. And the results are very obvious even today, most dramatically with the widely-criticized failure to hold even a vote on Merrick Garland's nomination to the Supreme Court. Now President- elect Trump gets to fill that seats for the next several decades. Toughness pays, and maybe Democrats will learn that.

SCIUTTO: Yes, Dana, on that point, is that a new normal? Right? I mean, going forward -- I mean, this was, you know, the president by the Constitution has the right to make these -- to make these appointments. Obviously with Senate approval. But, you know, why would this change, I suppose, is almost the question? Because when the Democrats get the same opportunity might they do the same?

BASH: Well, there are a couple things.

One thing is -- let me be a little bit Pollyannaish and say that Jeffrey is, of course, 100 percent right that the best politics is for Chuck Schumer, the Democratic leader in the Senate, and Nancy Pelosi in the House to follow the exact same game plan that Mitch McConnell did, because it worked. But there's politics, and then -- this is my Pollyanna part -- what's good for the country. And maybe, just maybe, somebody can say, "Uncle." And if it's the Democrats, it's OK, because it's just where we are right now in the political world. And say, "There are places where we can work together, and we're not going to say no. And we're going to give you some wins, because it's not just for you; it's for the American people."

I know I sound really corny, but I've seen this so -- year in and year out, as you said, get so much more bitterly partisan in the halls of Congress and up and down Pennsylvania Avenue. Something's got to give.

And the other thing I will quickly say...

SCIUTTO: Interestingly, on that point...

BASH: Yes.

SCIUTTO: ... because I want to be a Pollyanna.

BASH: Yes.

SCIUTTO: You know, I've got kids, right? I want -- I want the country to be a happy place, but let's be practical here. When you look at that practically, because that division is not just confined to the halls of Congress. You see it, folks at home see it in their Facebook feeds, right? I'm sure they've heard it over the Christmas dinner table.

You know, the sense is the other side doesn't have the country's best interests at heart. Right? I mean, that's what these -- those are the districts that these guys, men and women are running in.

BASH: No question. But what I was going to say, and this is actually to the second point, which is Donald Trump is not a traditional Republican. Everything that he believes does not fall along traditional partisan Republican lines, whether it's trade or maybe even the way he wants to handle entitlements.

So that's going to scramble things a bit, so that it might make it harder for Democrats to obstruct, and maybe even more importantly, harder for all Republicans to go along with their Republican president.

SCIUTTO: Listen, folks, stand by. We have a lot more time. We have some new information coming in. Please stay with us. We'll be right back after this break.

(COMMERCIAL BREAK)

[17:42:03] SCIUTTO: Donald Trump's latest effort to avoid a major distraction has hit an obstacle. New York's attorney general says that Trump cannot close down his charitable foundation, because it is still under investigation.

CNN's Jessica Schneider is in Palm Beach, Florida, near where President-elect Trump is vacationing. So tell us more about what the New York attorney general is trying to do here.

JESSICA SCHNEIDER, CNN CORRESPONDENT: Well, Jim, Eric Schneiderman says that Donald Trump will have to wait to dissolve his foundation until after an investigation is complete, and New York's top cop isn't the only one speaking out.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): After the president-elect's announcement that he will end the Trump charitable foundation, New York's attorney general saying, not so fast: "The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete."

New York A.G. Eric Schneiderman, who was a Hillary Clinton supporter, launched the prohibit in the midst of the campaign, amid allegations Donald Trump used the foundation's funds to settle his personal business dealings.

Trump making no mention of the order to stop fundraising issued by the A.G. in October that is still in effect -- only saying "The Foundation has done enormous good works over the years in contributing millions of dollars to countless worthy groups. "However, to avoid even the appearance of any conflict with my role as

president, I have decided to continue to pursue my strong interests in philanthropy in other ways."

But Donald Trump hasn't even donated to his own charity since 2008, according to the foundation's tax records. The Democratic National Committee mocking plans to shut the foundation down, saying the announcement "is a wilted figure leaf to cover up his remaining conflicts of interest and his pitiful record of charitable giving."

President George W. Bush's chief ethics lawyer says closing the foundation is a good start.

HOWARD PAINTER, FORMER CHIEF WHITE HOUSE ETHICS LAWYER: Right now, we need to president who is free of conflict of interest. That means dissolving the foundation. That also means President Trump selling off his business interests that create conflicts of interests, making sure there's no foreign money coming into his operations.

SCHNEIDER: The Trump team has already dealt with several issues, settling the Trump University laws, Eric Trump shutting down his foundation, and the Trump Organization recently dropped its battle with hotel workers in Las Vegas and D.C. over unionization, allowing the D.C. workers to hold a vote and agreeing to a four-year contract with Vegas workers.

But still no road map on how the president-elect will disentangle himself from his worldwide business empire.

(END VIDEOTAPE)

[17:45:00] SCHNEIDER: But the Trump team is promising a press conference in the next few weeks to detail Donald Trump's business plans after initially postponing a December 15 press conference. But of course, this is a cumbersome process. In fact, the general counsel for the Trump Organization says that they are currently working to reevaluate some of their various transactions; also working to comply with conflict laws, Donald Trump, of course, saying that he is immune from those conflicts laws. And he is right, save for the Emoluments Clause of the Constitution, which bars officials from doing business with foreign governments -- Jim.

SCIUTTO: We're all going to have to become constitutional scholars. Jessica Schneider in Florida, thanks very much.

We're back now with our political and legal experts' panel. Ron, if I could go to you first. You heard the DNC statement on this, calling this a wilted fig leaf to cover up his remaining conflicts of interest. What's your reaction to this? Is that substantial at all?

BROWNSTEIN: You know, it's a step, but this is the secondary front, right? I mean, the charitable foundation, you know, charitably could called a charitable foundation in the sense that it had a very limited operation.

The real key question here, as Richard Painter was alluding to, is this unprecedented level of business entanglements. We have not elected someone with all of these business connections and they present all sorts of problems in all sorts of directions about the interests of either domestic interests or foreign interests trying to curry favor with the President or his family by doing business, you know, with the Trump Organization.

And we are still waiting. It does not appear that the solution that people like Mr. Painter talks about, a full dissolution of the assets, conversion of it into a blind trust, is on the table. So anything is going to be short of that. And as, I think, wherever it is resolved is still going to leave us facing questions throughout his presidency.

SCIUTTO: David, your reporter and colleague, David Fahrenthold, this is great reporting, digging into the foundation here. You heard Ron Brownstein saying, it's charitable to call it a charitable foundation. I mean, what are the facts that lead to that assessment?

SWERDLICK: Right, it is charitable to call it a charitable foundation. Most charities use the person named as the name brand person of the charity to give their money to charities. In this case, David Fahrenthold's reporting found among other things that much of the money that was used in the foundation was money that was donated by others and then given out in the name of Donald Trump's Foundation.

Also, David Fahrenthold looked at whether or not Donald Trump's Foundation was using more than $250,000 to settle disputes with, you know, local political entities rather than as charitable donations.

SCIUTTO: So Jeffrey Toobin, you know a thing or two about the law here. You have the New York Attorney General still investigating this. Is the President-elect in real legal trouble?

TOOBIN: I think he's in political trouble more than he is in legal trouble. I mean, this is not a criminal matter. He's not going to be indicted, but this is going to be an issue that doesn't go away during his presidency.

And people who are ill-disposed towards him, and it's worth noting that he has a majority of the country that is, already, has an unfavorable view of him, according to polls, you know, will continue to ask questions and be suspicious of the fact that the Trump family is running this business called Trump at the same time the family is closely advising him on policy matters.

I mean, this is going to be a part of the Trump presidency. Obviously, he won the election, so enough voters didn't care about the issue to elect him, but that doesn't mean that the issues simply are going to go away now that he's president.

SCIUTTO: And, of course, the majority of the matter is on Capitol Hill and the Housing Senate. I mean, is there any sign when you speak to folks up there all the time that a Republican-controlled House and Senate will press this issue of conflicts of interest?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Yes, at the front end, because they don't want to have to deal with this. They don't want to be in a position for the investigative committees in the House and the Senate to be called upon to look into conflicts of interest, to look into whether a foreign government has tried to curry favor with Donald Trump by doing X, Y, and Z vis-a-vis the Trump Organization. So, yes, they don't want those distractions.

In Capitol Hill, they want to use the fact that they have a majority in Congress, they have a Republican in the White House, to get policy done that they haven't been able to do for eight years.

TOOBIN: What --

SCIUTTO: Well, be watching it -- sorry, we got to leave it there, Jeffrey, unfortunately.

TOOBIN: OK.

SCIUTTO: But we'll be talking about this for some sometime, we know.

[17:49:10] Coming up next, we mark yet another shocking death in the music world. George Michael's video made him a global superstar. Tonight, he's being remembered for much more than just his singing.

(COMMERCIAL BREAK)

SCIUTTO: Tonight, we're following an extraordinary outpouring of grief over the death of pop music superstar George Michael. The 53- year-old singer's body was discovered just yesterday at his home in England, a death that his manager attributes now to heart failure. CNN's Ian Lee looks back at Michael's career.

(BEGIN VIDEOTAPE)

GEORGE MICHAEL, SINGER: Wake me up before you go, go, go. Don't leave me hanging like a yo-yo.

LEE (voice-over): By 1986, Michael launched an incredible solo career. His number one album, "Faith," raising eyebrows with its first single.

MICHAEL: I want your sex.

LEE (voice-over): The risque lyrics and provocative video drawing sharp criticism from those wanting to bring awareness to the growing AIDS epidemic and the need for safe sex.

MICHAEL: I got to have faith, faith, faith.

LEE (voice-over): "Faith" producing four number one singles, including "Father Figure." MICHAEL: I'll be your father figure. Just put your tiny hand in

mine.

LEE (voice-over): "One More Try."

MICHAEL: Just you.

LEE (voice-over): And "Monkey."

MICHAEL: Why can't you do it? Why can't you set your monkey free?

LEE (voice-over): By the '90s, Michael became a more serious artist, celebrating his independence from the pop machine.

MICHAEL: Freedom, freedom.

[17:55:02] LEE (voice-over): Refusing to appear in the video "Freedom 90" which featured cameos from pop models lip-synching his lyrics.

But the late '90s were rough for the pop icon. He was arrested by an undercover police officer and charged with engaging in a lewd act at a park in Beverly Hills, leading him to reveal in a CNN interview that he was gay in 1998.

MICHAEL: I don't feel any shame whatsoever, and neither do I think I should.

LEE (voice-over): In later years, there were drug-related arrests and a nasty car accident in 2010. He served a month in jail for driving under the influence of marijuana.

But his career continued to flourish, thanks to his powerful vocals. At nearly 50, Michael, once again, found critical success with his sixth and final album, "Symphonica," a creative master piece backed by a full orchestra.

MICHAEL: The first time ever saw your face.

I've been so lucky. I've had an amazing, amazing life.

I will be the one who loves you till the end of time.

(END VIDEOTAPE)

SCIUTTO: George Michael dead at just 53.

Coming up. More reaction as Israel, lashing out at the U.S. as well as the countries that voted to condemn its continuing settlements in the West Bank.